Investing in Gold Online

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Some investors see gold as an important portfolio hedge, designed to reduce the risk of stocks, bonds and other paper assets. Others see gold as a safe haven during troubled times, and a way to protect themselves against inflation and a falling dollar. No matter which camp you fall into, when it comes time for you to buy gold online you have a number of choices.

One way to add gold to your portfolio is by buying shares of Gold Exchange Traded Funds that track the price of the commodity or shares of individual gold mining companies. While those choices can be good for some people, others prefer the security of owning a tangible asset instead of pieces of paper that merely represents ownership in a given company or asset.

Investors who are looking for a way to invest in tangible gold have a number of options as well. There are online companies and brokerage firms that specialize in gold bars and a number of other dealers who specialize in gold coins and other collectibles. Gold bullion is a great way to play the gold market, since you can invest directly in the metal. When you buy a one ounce gold bar, you know exactly how much you are paying, and you can track the value of that ounce of gold simply by watching the gold price in the financial press each day. What bullion does not give you, however, is the tangible satisfaction of owning a beautiful collectible. One of the advantages of investing in gold is that you are investing in a beautiful asset as well as a potentially profitable one. Buying gold coins is a great way to combine the excitement of collecting with the practicality of investing.

With the possibility of gold increasing in value and the dollar depreciating, now may be the time to buy gold online. Whichever method you decide to buy gold online, this Banks.org article will walk you through the process. As always, be sure to first consult with a financial adviser before making any investment decisions. Select from our menu to read more about each gold buying alternative.

Why Buy Gold?

Gold is a practical and intelligent investment choice for numerous reasons.

  • Gold is Tangible:  Unlike money in a savings account or stock in a company, you can hold gold in the palm of your hand. You can feel its weight and see its beauty.
  • Gold is a Finite Resource:  There is a limited supply of gold in Earth’s surface. Paper money can be printed in unlimited quantities and is only worth what we perceive it to be worth.
  • Gold has Many Uses:  Gold has many purposes besides its use as an investment vehicle. The majority of gold demand is for the manufacture of jewelry. The rest of the demand is for practical use in electronics, dentistry, aerospace, medicine and other industries. Your cellphone, computer, GPS device, and television all have a tiny amount of gold in them. If you believe humans will always require such devices, then gold will forever be in demand. Gold can be used by dentists for fillings, crowns, and bridges. Gold is used in astronaut visors, satellites, and every spacecraft ever launched. In medicine, gold salts are used to treat arthritis and other serious conditions. Gold has these many diverse uses because of its amazing physical properties.
  • Gold has Unique Physical Properties:  Gold is the most malleable metal, which means it easily bends and forms thin shapes without coming apart. Gold is a very ductile metal, as it can be drawn out into wire or thread without breaking. Gold is also soft yet can be made hard when combined with other metals to form an alloy. These characteristics make gold very easy to use. Furthermore, gold is resistant to moisture, air, corrosion, and chemical reactions and yet is shiny and not gray in color like most other metals. Gold is a highly efficient conductor of electricity and electronic components created with it are extremely reliable. Gold is non-allergenic and has no taste or smell, which makes it perfect for dentistry. Gold film reflects electromagnetic radiation and resists heat which makes it indispensable in the aerospace industry. Finally, gold salts (not metallic gold) are anti-inflammatory. Medicine, such as brand name Ridaura, contains gold and is administered to reduce the pain and swelling of rheumatoid arthritis and slow its progression.
  • Gold is Easy to Buy and Sell:  Whether in coins or bars, gold is recognized world-wide as a method of monetary exchange. You can go to any legitimate jewelry store in any city in the world and get a decent price for your gold. Online, you can easily and securely buy Gold Coins or Gold Bars and expect to play not much over the spot price. Alternatively, you go through your online broker and invest in Gold Mining Stocks or hold gold indirectly through Gold ETFs.
  • Gold is a Hedge Against Inflation:  When inflation occurs, there is a rise in the prices of the goods and services you need. If inflation were to spiral out of control, as it has in some countries, a currency loses its value and could eventually become worthless. A precious metal like gold can help offset loses due to inflation and currency devaluation.
  • Gold Diversifies Portfolios:  You may believe you are diversified because you hold investments in stocks, bonds, currency, and real estate. However, that is not the case. Natural disasters, social unrest, war, and terrorist attacks are examples of events that could cause the decrease in value of all 4 of those investments. You can reduce your risk during times of uncertainty by adding gold to your investment portfolio.

 

Why Invest in Gold?

Though gold has been a popular investment for thousands of years, many investors have yet to consider the many reasons that gold can be an attractive investment for their personal situation. Not only can gold provide a measure of safety and protection from inflation, an investment in gold can also be profitable. Here are the four main reasons why you should invest in gold.

  1. Safety:  Many people are uncomfortable with investments in stocks, bonds, and other paper investments due to the potential for fraud and market manipulation. However, those who hold physical gold have reduced risk from fraud as the physical gold can be stored at home, in a bank safe deposit box, or other secure location. For many, the ability to physically hold and possess an investment in gold is one of the most attractive reasons to invest in gold. In addition, stocks and many other forms of investments depend on the performance of a specific company to retain value. Though the price of gold can decline, gold has held value for thousands of years as its value is not based on a company’s ability to sell products at a profit.
  2. Demand:  Gold is the most desired material for the manufacture of jewelry and other ornamental objects. In India and many other countries, owning gold is not only a sign of wealth but it is also an important part of many cultural traditions. As the economies in India and other developing nations continue to grow, more people will be able to afford to buy gold, fueling an increase in demand which will result in higher gold prices. However, the demand for gold is based on more than just decorative items. Gold has a number of industrial and manufacturing uses due largely to gold’s resistance to corrosion and ability to conduct electricity.
  3. Ease of Investment:  Though buying stocks, bonds, and other investments is not as complicated as it once was, gold is still one of the easiest investments to buy and sell. Buying gold is much like buying any other product. You simply determine how many ounces of gold coins or gold bullion to buy and place your order. Selling gold is just as easy, notify the buyer of the amount of gold that you have to sell and the buyer will make an offer. As an investor, you can buy and sell gold without the assistance of a stock broker or other professional.
  4. Scarcity:  Gold is a natural element that cannot be produced in a factory. More importantly, governments cannot simply print more gold as they can with paper money. As many governments increase the amount of fiat currency in circulation, the value of the money has decreased which raises the value of gold relative to the devalued money. With large budget deficits and rising national debts, governments are likely to continue printing money in the future which may increase the demand for gold and increase gold’s value.

 

Buying Gold Coins Online

If you are looking to buy gold coins online, it is important to understand the differences between the two types of gold coins: gold content coins and collectible gold coins.

When you buy gold content coins, which are also known as gold bullion coins, you are purchasing the metal itself, and the coins are priced based on the amount of gold they contain. If you buy a pure one ounce gold content coin online, you can expect to pay very close to the spot price of an ounce of gold, with only a little markup in the price. Popular gold content coins include South African Krugerrands, United States American Gold Eagles, Canadian Gold Maple Leafs, and Chinese Gold Pandas. The most common gold coin sizes are one ounce, half ounce, quarter ounce, and one-tenth ounce.

Where to Buy Gold Coins Online

The list below features reputable online dealers that sell gold content coins online. “Markup Percent” is our current estimation of how much of a premium over the spot price you can expect to pay for the gold coin seller’s least expensive one ounce coin (usually a Krugerrand). For example, if a seller’s Markup Percent is 10% and the spot price of gold is $1000, you can except to pay about $1100 for a one ounce coin. This does not include shipping, insurance, sales tax, or any other additional fees.

Coin Dealer Coin Markup Minimum Order Shipping/Handling Insurance
Kitco +4% $2500 Flat $30 $4 per $1000
APMEX +4.5% $50 $12.95 for orders < $250
$19.95 for orders < $1000
$24.95 for < $25000
Free for orders $25000+
Included in S/H fee
JM Bullion +5% None $7.99 for orders < $199
Free for orders $200+
Included in S/H fee

 

Collectible gold coins, which are also called numismatic coins, are a different animal altogether, and it is important to tread carefully. With collectible coins, the price is determined by two distinct factors, the amount of gold it contains and the desirability of that particular coin based on its condition, rarity, and history. That means you have two specific risks – the risk that the price of gold will decline and the risk that collectors will find the coin less desirable in the future. You can still make money with collectible gold coins, but it pays to have a background in collecting or some knowledge of the coin market before you begin.

 

Buying Gold Bars Online

As with gold content coins, gold bars offer a way to tangibly own gold. So why should you buy gold bars online instead of gold coins? Gold bars are popular investments because they tend to cost less than an equivalent sized coin.

Another advantage to buying gold bars instead of gold coins is that bars are available in larger sizes. If you buy gold bars online you will find 100 ounce bars available at several dealers, whereas coins are only available in one ounce or less. However, keep in mind that it may be tougher to find buyers for bars of such a large size. Also, there is the slight possibility that a gold coin could later become more valuable to collectors. This is not a possibility with gold bars.

Where to Buy Gold Bars Online

The list below features reputable online dealers that sell gold bars online. Some dealers allow you to choose which refiner minted your bars. Others, often at a discount, will select your gold bars themselves. Some dealers will include the assay certificate with your purchase and others won’t. This does not decrease the value of the bars as long as the bars are stamped by a well-known refiner such as Engelhard, Johnson Matthey, Pamp Suisse, or Perth Mint. “Markup Percent” is our current estimation of how much of a premium over the spot price you can expect to pay for the gold bar seller’s least expensive one ounce bar. For example, if a seller’s Markup Percent is 10% and the spot price of gold is $1000, you can except to pay about $1100 for a one ounce bar. This does not include shipping, insurance, sales tax, or any other additional fees.

Coin Dealer Bar Markup
Minimum Order Shipping/Handling Insurance
Kitco +1.6% $2500 Flat $30 $4 per $1000
APMEX +2.8% $50 $12.95 for orders < $250
$19.95 for orders < $1000
$24.95 for < $25000
Free for orders $25000+
Included in S/H fee
JM Bullion +3.5% None $7.99 for orders < $199
Free for orders $200+
Included in S/H fee

 

Selling Gold Online

Do you have old jewelry lying around that you will never wear? Have you bought gold coins or bars as an investment and now is the time to cash out? There are several ways to safely and securely sell gold.

How Much to Expect

At a very minimum, you should expect to receive 90% to 95% of the fair market value for your pure gold coins, bars, or bullion. For jewelry, you should get at least 70% of the melt value because of the costs involved in melting and refining. Be sure to weigh your gold and check the current price of gold beforehand. Expect to receive low-ball offers. Do not hesitate to say, “No thanks!”, and take your gold elsewhere.

Sell Gold to a Jeweler

Your local jewelry store or pawn shop will always be in the market for gold. They will examine the gold in front of you, determine it’s value, and make you an offer. The problem is, it’s tough to know if they are offering a fair price. If you go this route when selling gold, be sure to check with the Better Business Bureau to see if the store is trustworthy. This can be a daunting and time consuming task.

Sell Gold at a Gold Party

What in the world is a gold party you’re asking? A gold party is a small gathering at a host’s home to sell gold to a gold buyer. Not only are gold parties fun, but you are paid cash for your gold right then and there. The problem with gold parties is that you will not be given full value for your gold. Why? Because in most cases, the host of the party gets a commission (typically 10%) and the company that buys the gold from the host makes a profit as well. Gold party companies generally pay as little as 50% of the actual value.

Sell Gold Online

To sell gold online, the first task is to provide the gold refiner website with your contact information. You will then receive a kit in the mail which will include a return envelope and information about how to package your gold. Commonly, the return envelope will have a tracking number, be postage paid, and include insurance up to a specified amount. The gold refiner will appraise your gold shipment and determine how much to offer you. Most refiners will either call you or provide a way to check the appraisal amount online. If you decide to not accept the offer, your gold will be mailed back to you. Usually, you will have about a week to decide whether or not to accept. Check the refiner website beforehand to know what the deadline is. If you do accept the purchase offer, payment is often made by check or via PayPal. This method is far and away the easiest and most efficient way to sell your unwanted gold.

 

Gold Mining Stocks

One alternative to buying tangible gold is to buy gold mining stocks. Shares of publicly-traded gold mining companies can be a great addition to any investment portfolio. Gold mining stocks offer liquidity without the risks of holding physical gold.

On the downside, forces other than the price of gold, such as engineering problems, production issues, and shareholder sentiment, can affect gold mining stock prices.

See below for the largest gold mining stocks available for trading on NYSE or NASDAQ. Please note that several of these companies mine other metals in addition to gold.

Mining Stock Ticker Country Industry
Newmont Corporation NEM USA Gold
Barrick Gold Corporation GOLD Canada Gold
Freeport-McMoRan FCX USA Copper
Franco-Nevada FNV Canada Gold
Wheaton Precious Metals WPM Canada Gold
Kirkland Lake Gold KL Canada Gold
Agnico Eagle Mines AEM Canada Gold
Teck Resources TECK Canada Other
Sibanye Stillwater Limited SBSW South Africa Gold
Gold Fields Limited GFI South Africa Gold
AngloGold Ashanti Limited AU South Africa Gold
Kinross Gold Corporation KGC Canada Gold
Royal Gold RGLD USA Gold
B2Gold Corp BTG Canada Gold
Yamana Gold AUY Canada Gold
Alamos Gold AGI Canada Gold
SSR Mining SSRM Canada Gold
Hecla Mining Company HL USA Gold
Pretium Resources PVG Canada Gold
Osisko Gold Royalties OR Canada Gold
NovaGold Resources NG Canada Gold
Harmony Gold Mining HMY South Africa Gold
Centerra Gold CGAU Canada Gold
Equinox Gold EQX Canada Gold
Coeur Mining CDE USA Gold
Eldorado Gold EGO Canada Gold
Seabridge Gold SA Canada Gold
Buenaventura BVN Peru Gold
Goldcorp Merged with Newmont
Randgold Resources Merged with Barrick Gold

Another option to buying one or more of the above stocks is to buy a basket of gold mining company stocks. The VanEck Vectors Gold Miners ETF (ticker: GDX) holds shares in over 50 different gold mining companies, including those on the above list.

 

Gold ETFs (Exchange Traded Funds)

In addition to gold mining stocks, another alternative to buying tangible gold is to buy gold ETFs, or Exchange Traded Funds. Gold ETFs are bought and sold on the stock market, so they offer the same liquidity as gold mining stocks but more closely follow the spot price of gold. The best gold ETFs also provide you with more diversification when compared to owning shares in a single gold mining company. One disadvantage to a gold ETF is that you may not get the same lower capital gains tax rate if you sell your shares for a profit.

See the list below for the largest gold ETFs available for trading on the U.S. stock markets.

Ticker
GLD
IAU
OUNZ
AAAU
SGOL
DGL
UGL
ETF Manager
State Street
BlackRock
VanEck Merk
Goldman Sachs
Aberdeen Standard
Invesco
ProFunds Group
Expense Ratio
0.40%
0.25%
0.25%
0.18%
0.17%
0.75%
0.95%